Nixcil Pharmaceuticals Specialities Ltd., Kolkata V. DCIT, Central Circle - XXII, Kolkata

ITA 1847/KOL/2009

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4934 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 11-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 05-11-2009
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU ACIT
• Assessee Lawyers: A K TIBREWAL
• Keywords: Search and seizure; Retrospective amendment; Initiation of penalty proceedings
• Section: 133A; 153A; 132

Judgement Text

I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER & SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NOS. 1847 TO 1850/KOL/2009 ASSESSMENT YEARS: 2004-2005 TO 2007-2008 NIXCIL PHARMACEUTICALS SPECIALITIES LTD. VS- THE DCIT, CENTRAL KOLKATA [PAN:AABCN 6977H] CIRCLE-XXII, KO LKATA (APPELLANT) (RESPONDENT) APPEARANCES : FOR THE ASSESSEE : SHRI A.K. TIBREWAL, FCA AND SHRI AMIT AGARWAL, ADVOCATE FOR THE DEPARTMENT : SHRI DAVID Z. CHAWNGTHU, ACIT, SR. D.R. DATE OF CONCLUDING THE HEARING : JANUARY 12, 2016 DATE OF PRONOUNCING THE ORDER : MARCH 2 ND , 2016 O R D E R PER SHRI S.S.VISWANETHRA RAVI :- THESE FOUR APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE COMMON ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-III, KOLKATA DATED 28.08.2009, W HEREBY HE CONFIRMED THE PENALTIES OF RS.39,489/-, RS.9,14,410 /-, RS.69,98,800/- AND RS.26,39,502/- IMPOSED BY THE AS SESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT FOR ASSE SSMENT YEARS 2004-2005, 2005-2006, 2006-07 AND 2007-2008 RESPECT IVELY. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH BELONGS TO GROUP COMPANIES. A SEARCH AND SEIZURE ACTION UND ER SECTION 132 WAS CONDUCTED IN THE CASES BELONGING TO THE SAID GR OUP ON I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 2 OF 10 27.12.2006 INCLUDING THE CASE OF THE ASSESSEE. PURS UANT TO THE SAID SEARCH, NOTICES UNDER SECTION 153A WERE ISSUED BY T HE ASSESSING OFFICER TO THE ASSESSEE. DURING THE COURSE OF SEARC H, ADDITIONAL INCOME OF RS.10,70,71,834/- WAS OFFERED ON BEHALF O F THE ENTIRE GROUP AND IN THE RETURNS OF INCOME FILED IN RESPONS E TO THE NOTICES ISSUED UNDER SECTION 153A, AND AMOUNT OF RS.9,36,62 ,582/- WAS OFFERED IN THE HANDS OF THE VARIOUS ASSESSES BELONG ED TO THE GROUP. OUT OF THE SAID AMOUNT, A SUM OF RS.1,31,632/-, RS. 24,48,884/- ,RS.1,56,63,440/- AND RS.2,51,72,807/- WAS OFFERED IN THE HANDS OF THE ASSESSEES FOR A.Y. 2004-05, 2005-06, 2006-07 AN D 2007-08 RESPECTIVELY IN THE RETURNS OF INCOME FILED IN RESP ONSE TO NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 153A OF THE ACT. IN THE ASSESSMENTS COMPLETED UNDER SECTION 153A/143(3) OF THE ACT, THE INCOME DECLARED BY THE ASSESSEE IN THE RETURNS OF INCOME FOR A.Y. 2004-05, 2005-06, 2006-07 AND 2007-08 WAS ACCE PTED BY THE ASSESSING OFFICER. 3. SUBSEQUENTLY PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED BY THE ASSESSING OFFICER IN RESPECT OF ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN THE RETURNS OF IN COME FILED IN RESPONSE TO THE NOTICES ISSUED UNDER SECTION 153A F OR A.Y. 2004-05, 2005-06, 2006-07 AND 2007-08. THE EXPLANATION OFFER ED BY THE ASSESSEE IN RESPONSE TO THE PENALTY NOTICES ISSUED BY THE ASSESSING OFFICER MAINLY WAS THAT THE ADDITIONAL INCOME HAD B EEN OFFERED VOLUNTARILY AND THE SAME HAVING BEEN ACCEPTED IN TH E ASSESSMENTS, THERE WAS NO CASE OF ANY CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WARR ANTING LEVY OF PENALTY UNDER SECTION 271(1)(C). THIS EXPLANATION O F THE ASSESSEE I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 3 OF 10 WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER. ACCORDING TO HIM, THE ADDITIONAL INCOME WAS DISCLOSED BY THE ASS ESSEE ONLY AS A RESULT OF SEARCH AND SO THE DISCLOSURE MADE BY THE ASSESSEE COULD NOT BE CONSIDERED AS VOLUNTARY. HE, THEREFORE, PROC EEDED TO IMPOSE PENALTIES OF RS.39,489/-, 9,14,410/-, 69,98,800/- A ND RS.26,39,502/- FOR A.Y. 2004-05, 2005-06, 2006-07 AND 2007-08 RESP ECTIVELY BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESESE IN RESPECT OF ADDITIONAL INCOME OFFERED AS A RESULT OF SEARCH. 4. THE PENALTIES IMPOSED BY THE ASSESSING OFFICER U NDER SECTION 271(1)(C) FOR ALL THE FOUR YEARS UNDER CONSIDERATIO N WERE CHALLENGED BY THE ASSESSEE IN THE APPEALS FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(APPEALS), THE ASSESSEE MAINLY CLAIMED THE IMMUN ITY AVAILABLE UNDER CLAUSE 2 OF EXPLANATION 5 TO SECTION 271(1)(C ) BY CONTENDING THAT THE INCOME OFFERED DURING THE COURSE OF SEARCH HAVING BEEN DULY DECLARED IN THE RETURNS OF INCOME AND TAX THER EON HAVING BEEN PAID, NO PENALTY UNDER SECTION 271(1)(C) WAS LEVIAB LE AS PER CLAUSE 2 OF EXPLANATION 5 TO SECTION 271(1)(C). THIS STAND OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS). A CCORDING TO HIM, THE INCOME DISCLOSED BY THE ASSESSEE WAS ON AC COUNT OF UNDISCLOSED EXPENDITURE AND NOT ON ACCOUNT OF ANY I NCOME UTILIZED FOR ACQUIRING MONEY, BULLION, JEWELLERY OR OTHER VA LUABLE ARTICLE OR THINGS FOUND DURING THE COURSE OF SEARCH. HE ALSO N OTED THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCE OF INCOME FRO M WHICH THE UNDISCLOSED EXPENDITURE WAS MADE. HE, THEREFORE, HE LD THAT THE CONDITIONS STIPULATED UNDER CLAUSE 2 OF EXPLANATION 5 TO SECTION 271(1)(C) WERE NOT SATISFIED AND THE ASSESSEE WAS N OT ENTITLED OR I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 4 OF 10 ELIGIBLE TO CLAIM THE IMMUNITY PROVIDED THEREIN. AC CORDINGLY, THE PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER SE CTION 271(1)(C) FOR ALL THE FOUR YEARS UNDER CONSIDERATION WERE CON FIRMED BY THE LD. CIT(APPEALS). AGGRIEVED BY THE ORDERS OF THE LD. CI T(APPEALS), THE ASSESSEE HAS PREFERRED THESE APPEALS BEFORE THE TRI BUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE MAINLY RAISED T HREE CONTENTIONS IN SUPPORT OF THE ASSESSEES CASE THAT THE PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271( 1)(C) AND CONFIRMED BY THE LD. CIT(APPEALS) FOR ALL THE FOUR YEARS UNDER CONSIDERATION ARE NOT SUSTAINABLE. FIRSTLY, HE TOOK US THROUGH THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER T O SHOW THAT THE SATISFACTION REQUIRED FOR INITIATING THE PENALTY PR OCEEDINGS WAS NEITHER SPECIFICALLY RECORDED BY THE ASSESSING OFFI CER NOR THE SAME WAS DISCERNABLE FROM THE ASSESSMENT ORDERS PASSED B Y HIM. RELYING ON THE DECISION OF THE COORDINATE BENCH OF THIS TRI BUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS.- ACIT RENDERED VI DE ITS ORDER DATED 06.11.2015 IN ITA NO. 1303/KOL/2010, HE CONTE NDED THAT IN THE ABSENCE OF THIS BASIC REQUIREMENT, INITIATION O F PENALTY PROCEEDINGS ITSELF WAS BAD IN LAW AND THE PENALTIES IMPOSED IN PURSUANCE THEREOF ARE LIABLE TO BE CANCELLED. SECON DLY, HE CONTENDED THAT THE INCOME DECLARED BY THE ASSESSEE IN RESPONS E TO THE NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 153A HAVING BEEN ACCEPTED IN THE ASSESSMENTS BY THE ASSESSING OFFICE R WITHOUT MAKING ANY FURTHER ADDITION, THERE WAS NO CASE OF A NY CONCEALMENT OF PARTICULARS OF HIS INCOME BY THE ASSESEE OR FURN ISHING OF INACCURATE PARTICULARS OF SUCH INCOME WARRANTING LE VY OF PENALTY AS HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 5 OF 10 DAYABHAI PATEL VS.- ACIT (INCOME TAX APPEAL NOS. 1 181, 1182 & 1185 OF 2010 DATED 03.12.2014). HE CONTENDED THAT T HE CONDITIONS STIPULATED IN CLAUSE 2 OF EXPLANATION 5 TO SECTION 271(1)(C) WERE ALSO DULY SATISFIED BY THE ASSESSEE AND THE IMMUNIT Y AVAILABLE THEREIN WAS WRONGLY DENIED BY THE LD. CIT(APPEALS) TO THE ASSESSEE ON THE BASIS OF ALL IRRELEVANT GROUNDS, WHICH ARE N OT GERMANE TO THE ISSUE. 6. THE LD. D.R., ON THE OTHER HAND, STRONGLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE REVENUE S CASE THAT THE CASE OF THE ASSESESE IS A FIT CASE TO IMPOSE PENAL TIES UNDER SECTION 271(1)(C). HE CONTENDED THAT THE ADDITIONAL INCOME WAS SURRENDERED AND OFFERED BY THE ASSESESE TO TAX IN THE RETURNS O F INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A ONLY AS A RES ULT OF ADVERSE FINDINGS OF THE SEARCH AND SEIZURE ACTION AND THE S AME, THEREFORE, CANNOT BE CONSIDERED AS VOLUNTARY DISCLOSURE MADE B Y THE ASSESSEE TO EXONERATE HIM FROM THE LEVY OF PENALTY UNDER SEC TION 271(1)(C). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE FIRST CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESS EE REGARDING THE LACK OF SATISFACTION ARRIVED AT BY THE ASSESSING OF FICER FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C), IT IS OBSERVED THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SU VAPRASANNA BHATTACHARYA (SUPRA) HAS CONSIDERED THIS ASPECT IN DETAIL IN THE LIGHT OF THE PROVISIONS OF SECTION 271(1B) OF THE ACT AS WELL AS THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF MS. MADHUSHREE GUPTA VS.- UNION OF INDIA REPORTED IN 3 17 ITR 107 I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 6 OF 10 (DEL.) AND THAT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LIMITED VS.- CIT REPORTED IN 358 ITR 593 (SC) AND IT IS WORTHWHILE TO REFER TO THE OBSERVATIONS RECORDED IN THIS CONTEXT BY THE TRIBUNAL IN PARAGRAPHS NO. 6 & 7 OF ITS ORDER, WHICH ARE EXTRACTED BELOW:- 6. WE SHALL NOW DEAL WITH THE QUESTION WHETHER PRO PER SATISFACTION WAS ARRIVED AT BY THE AO FOR INITIATING PENALTY PRO CEEDINGS U/S.271(1)(C), IN THE COURSE OF CONCLUDING THE ASSESSMENT PROCEEDI NGS, WHEREIN THE ADDITIONS IN RESPECT OF WHICH PENALTY WAS IMPOSED W ERE MADE. ON THE ABOVE ISSUE, THE FIRST ASPECT WHICH, WE NOTICE IS T HAT IN THE ORDER OF ASSESSMENT, WHICH WE HAVE EXTRACTED IN THE EARLIER PART OF THIS ORDER, NOWHERE SPELLS OUT OR INDICATES THAT THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS GUILTY OF EITHER CONCEALING PARTICULAR S OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE O FFER TO TAX OF INCOME BY THE ASSESSEE HAS JUST BEEN ACCEPTED. IT IS NO D OUBT TRUE THAT IT IS NOT THE REQUIREMENT OF THE LAW THAT THE SATISFACTION HA S TO BE RECORDED IN A PARTICULAR MANNER, ESPECIALLY AFTER THE INTRODUCTIO N OF THE PROVISIONS OF SEC.271(1B) OF THE ACT WITH RETROSPECTIVE EFFECT FR OM 1.4.1989. NEVERTHELESS, AS LAID DOWN BY THE HONBLE DELHI HIG H COURT IN THE CASE OF MS. MADHUSHREE GUPTA (SUPRA), THE POSITION OF LA W BOTH PRE AND POST SEC.271(1B) OF THE ACT IS SIMILAR, INASMUCH, THE AO WILL HAVE TO ARRIVE AT A PRIMA FACIE SATISFACTION DURING THE COURSE OF PRO CEEDINGS WITH REGARD TO THE ASSESSEE HAVING CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS, BEFORE HE INITIATES PENALTY PROCEEDINGS PRIMA FACIE SATISFACTION OF THE AO THAT THE CASE MAY DESERVE THE IMPOSITION OF PENALTY SHOULD BE DISCERNIBLE FROM THE ORDER PASSED DURING THE COURSE OF THE PROCEEDINGS. AT THE STAGE OF INITIATION OF PENA LTY PROCEEDING, THE ORDER PASSED BY THE AO NEED NOT REFLECT SATISFACTIO N VIS-A-VIS EACH AND EVERY ITEM OF ADDITION OR DISALLOWANCE, IF OVERALL SENSE GATHERED FROM THE ORDER IS THAT A FURTHER PROGNOSIS IS CALLED FOR. TH E DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA (P) LTD. (SUP RA) HAS TO BE UNDERSTOOD IN THE CONTEXT OF THE FACTS OF THE SAID CASE. THE RELEVANT PORTION OF THE JUDGMENT IN THE AFORESAID CASE, READ S THUS: 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SUR RENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEA RCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PROCE EDINGS HAS I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 7 OF 10 NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION O F COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER 8 DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2 003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE S URVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE F ILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOU LD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMO UNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSE SSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASS ESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STA TUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FIL ED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A C ATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALT Y PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCO ME TAX ACT, 1961. 10. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCE EDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMEN T PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTI ON IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. 7. THE REVENUE PLACES RELIANCE ONLY ON THE SENTENCE APPEARING IN PARA-10 OF THE JUDGMENT WITHOUT READING IT IN THE C ONTEXT OF THE OBSERVATIONS IN THE LAST PORTION OF PARA-9 OF THE SAID JUDGMENT. THEREFORE EVEN THE HONBLE SUPREME COURTS DECISION SUGGESTS THAT THE SATISFACTION NEED NOT BE RECORDED IN A PARTICULAR MANNER BUT FRO M A READING OF THE ASSESSMENT ORDER AS A WHOLE SUCH SATISFACTION SHOUL D BE CLEARLY DISCERNIBLE. IF THE AO ACCEPTS ALL THE CONTENTIONS OF THE ASSESSEE AND THE OFFER OF INCOME THAT HAS NOT BEEN DECLARED IN THE R ETURN OF INCOME TO TAX WITHOUT INDICATING EITHER DIRECTLY OR INDIRECTLY TH AT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCU RATE PARTICULARS OF INCOME, IT CANNOT BE SAID THAT SATISFACTION FOR INI TIATION OF PENALTY PROCEEDINGS IS DISCERNIBLE FROM THE ORDER OF ASSESS MENT. IF THE ASSESSEE IN GOOD FAITH OFFERS INCOME TO TAX VOLUNTARILY PRIOR T O ANY POSITIVE DETECTION I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 8 OF 10 BY THE AO, SUCH VOLUNTARY OFFER CANNOT BE TAKEN ADV ANTAGE OF BY THE AO TO INITIATE PENALTY PROCEEDINGS AGAINST THE ASSESSE E WITHOUT SPECIFYING THE REASONS WHY PENALTY PROCEEDINGS ARE INITIATED U/S.2 71(1)(C) OF THE ACT. IN THE PRESENT CASE, WE HAVE READ THE ORDER OF ASSESSM ENT AS A WHOLE AND ARE SATISFIED THAT SATISFACTION FOR INITIATION OF P ENALTY PROCEEDINGS IS NOT DISCERNIBLE FROM THE ORDER OF ASSESSMENT. WE THEREF ORE CONCUR WITH THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE TH AT INITIATION OF PENALTY PROCEEDINGS WAS NOT PROPER IN THE PRESENT CASE AND ON THAT GROUND THE IMPOSITION OF PENALTY U/S.271(1)( C) OF THE ACT IS UNSUSTAINABLE. 8. KEEPING IN VIEW THE DECISION OF THE TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA (SUPRA), THE LD. D.R. WAS REQUIRED BY US TO POINT OUT ANY OBSERVATION OR FINDING RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDERS FOR ALL THE FOUR Y EARS UNDER CONSIDERATION, FROM WHICH THE SATISFACTION AS REQUI RED TO BE ARRIVED AT BY HIM TO INITIATE PENALTY PROCEEDINGS UNDER SEC TION 271(1)(C) IS DISCERNABLE. HOWEVER, HE HAS NOT BEEN ABLE TO PINPO INT ANY SUCH OBSERVATION OR FINDING RECORDED BY THE ASSESSING OF FICER IN THIS CONTEXT. A PERUSAL OF THE ASSESSMENT ORDER ALSO SHO WS THAT THERE IS NO SUCH OBSERVATION OR FINDING GIVEN BY THE LD. CIT (APPEALS) FROM WHICH THE SATISFACTION AS REQUIRED TO BE ARRIVED AT BY THE ASSESSING OFFICER IS DISCERNABLE. THE DECISION OF THE COORDIN ATE BENCH OF THIS TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA ( SUPRA) THUS IS CLEARLY APPLICABLE IN THE PRESENT CASE AND RESPECTF ULLY FOLLOWING THE SAME, WE HOLD THAT IN THE ABSENCE OF THE REQUISITE SATISFACTION RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, THE INITIATION OF PENALTY PROCEEDINGS ITSELF WAS BAD IN LAW AND THE PENALTIES IMPOSED IN PURSUANCE OF SUCH INITIATION A RE NOT SUSTAINABLE. 9. IT IS ALSO OBSERVED THAT THE INCOME SURRENDERED DURING THE COURSE OF SEARCH WAS DECLARED BY THE ASSESSEE IN TH E RETURNS OF I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 9 OF 10 INCOME FILED FOR FOUR YEARS UNDER CONSIDERATION, I. E. A.Y. 2004-05, 2005-06, 2006-07 AND 2007-08 IN RESPONSE TO THE NOT ICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 153A AND THE IN COME SO DECLARED WAS ACCEPTED BY THE ASSESSEE WITHOUT MAKIN G ANY FURTHER ADDITION. IN THE CASE OF CIT VS.- KIRIT DAYABHAI P ATEL VS- ACIT (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE HONBLE GUJARAT HIGH COURT THAT THE PENALTY UNDER S ECTION 271(1)(C) IS LEVIABLE ONLY ON THE INCOME ASSESSED OVER AND AB OVE THE INCOME RETURNED UNDER SECTION 153A. AT THE TIME OF HEARING BEFORE US, THE LD. D.R. HAS NOT BROUGHT TO OUR NOTICE ANY DECISION OF THE HONBLE HIGH COURT OR HONBLE SUPREME COURT TAKING A DIFFER ENT VIEW ON THIS ASPECT. WE, THEREFORE, RESPECTFULLY FOLLOW THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAY ABHAI PATEL (SUPRA) TO HOLD THAT PENALTIES IMPOSED BY THE ASSES SING OFFICER UNDER SECTION 271(1)(C) FOR A.Y. 2004-05, 2005-06, 2006-07 AND 2007-08 ARE NOT SUSTAINABLE ON THIS GROUND ALSO. AC CORDINGLY, WE CANCEL THE PENALTIES IMPOSED BY THE ASSESSING OFFIC ER UNDER SECTION 271(1)(C) AND CONFIRMED BY THE LD. CIT(APPEALS) FOR ALL THE FOUR YEARS UNDER CONSIDERATION AND ALLOW FOUR APPEALS OF THE ASSESSEE. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 2 ND , 2016. SD/- SD/- (P.M. JAGTAP) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER KOLKATA, THE 2 ND DAY OF MARCH, 2016 I.T.A.NOS.184 7 TO 1850/KOL./2009 ASSESSMENT YEARS: 2004-2005 TO 2007-08 PAGE 10 OF 10 COPIES TO :(1) NIXCIL PHARMACEUTICALS SPECIALITIES LTD. 12-A, AMRITA BANERJEE LANE, KOLKATA-700 026 (2) DEPUTY COMMISSIONER OF INCOME TAX (CENTRAL) CIRCLE-XXII, KOLKATA, (3) COMMISSIONER OF INCOME-TAX (APPEALS), KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA TALUKDAR/SR. P.S.(OS)